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A Tale of Two Countries: US – Canada Trade

A Tale of Two Countries: US – Canada Trade. Basic Trade Vocabulary. Export – any good that is sent out of the country Import – any good that is brought into the country from another Voluntary Trade – trade between countries in which both countries benefit from the exchange

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A Tale of Two Countries: US – Canada Trade

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  1. A Tale of Two Countries:US – Canada Trade

  2. Basic Trade Vocabulary • Export – any good that is sent out of the country • Import – any good that is brought into the country from another • Voluntary Trade – trade between countries in which both countries benefit from the exchange • Trade Barriers – economic, political, or geographical conditions that make trade difficult or impossible • Specialization – when a country produces the goods it can make easily and trades for the goods it cannot easily produce

  3. US – Canada Trade • Canada and the US both have market-style economies • Largest trade relationship in the world – valued at $627 billion in 2011 • Canada is the #1 foreign supplier of energy to the United States.

  4. Side by Side Comparison

  5. Specialization Canada United States Agricultural products Chemicals Capital goods Automobiles medicine • Motor vehicle, machinery, and aircraft parts • Telecommunications equipment • Plastics, chemicals • Wood pulp and timber • Crude petroleum, natural gas, electricity

  6. Exports and Imports • Canada • 75% of exports go to the US • 50% of imports come from the US • United States • 19% of exports go to Canada • 14% of imports come from Canada (2nd to China)

  7. Making Trade Easier • North American Free Trade Act (NAFTA) • Signed in 1994 • Promoted free trade between Canada, Mexico, and the US by removing economic trade barriers

  8. Exchanging Currencies • In order for countries to trade, they must exchange currencies. • Exchange Rate – the value of one country’s currency compared to another country’s currency • For example, if an American company wants to buy lumber from a Canadian company, the American company will exchange American Dollars for Canadian Dollars so that the trade can take place.

  9. References • CIA World Factbook (2012): • Canada - https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html • United States – • https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

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